Dividends and Green Gold

If you go into a supermarket, one of the items that is hard to miss is avocado. They are generally on sale because lots of people like them and supermarkets want to increase sales. If you go back less than 100 years ago, avocados were luxury items that luxury hotel chefs and their patrons enjoyed. How did avocados go to main stream? The book titled Green Gold written by Sarah Allaback and Monique F Parsons published by Counterpoint, LA and San Franciso, 2025 outlines the story.

Avocadoes are generally a good tasting food and millions of people enjoy them around the world. The avocado origins in Mexico and is and was a regional staple in Latin America.

People have been going to Latin America for centuries and it is not surprising, when people go to over countries they try the food of the country and some of the times they love it. There generally is a logistic problem that the food grows in a particular climate and much of the US has a frost line. If you have a garden, you know frost kills plants. If you a grower, you worry about frost, because that is your investment. The plant has to be adapted to grow in commercial quantities.

On New Year’s one of the traditions on TV is watching the Rose Bowl Parade. The Rose Bowl Parade has been going on since 1890 and comes from Pasadena, California. For generations, Pasadena has been a recognized center of gardening. Every story needs a wealthy benefactor, and avocados had one, railroad tycoon Henry Huntington, office building had a restaurant one floor below Mr. Huntington’s office where he ate avocados every day. Mr. Huntington was inspired enough to add an avocado orchard to his lavish estate gardens where William Hertrich was the nursery man.

When water was brought to LA (LA is essentially a desert like condition) through the 230 mile aqueduct, people starting grow a variety of tropical plants.

The first avocados planted in the continental US came to Florida. In 1833, Henry Perrine, the American consul in Campeche, Mexico was responding to a request from President John Quincy Adams for government officials to assist in identifying and shipping seeds of useful tropical plants to America.

The Lincoln administration formalized the federal government’s role in American agriculture in 1862 with the establishment of the Department of Agriculture and passed the Morrill Land-Grant College Act, allowing states to establish colleges in largely rural areas. This led to the founding of the University of California Citrus Experimental Station which usher in a new era in scientific fruit analysis, which continues to this day. How to find the best fruit for both consumer and producer which is disease resistant and travels well to markets around the world?

The Boston Cooking School Magazine published recipes to encourage people to try different foods. One banana recipe book was done for United Fruit. The published enjoyed tropical fruits and they also were good for you such as avocado salad.

Back in California, people such as Fred Popenoe planted a couple of avocado trees on his property and soon expanded his nursery. Avocados have a long history in Mexico and eventually people in California were looking for the fruit which could be picked and did not ripen too fast so it could be sold at premium prices. The search was all over Latin America, but the standard bearer was a tree from Atlixco, Mexico. The avocado had thin skin and a nutty flavor. Its seeds were planted in California and grew well so it became the standard bearer and is known as Fuertes.

Rudolph Hass decided to grow avocados and planted 300 sprouted avocado seeds of Guatemalan stock. Once the seeds became seedlings, he was trying to graft the Fuertes to the trees. One baby tree refused to accept the graft, even after multiple attempts. Mr. Hass decided to leave it alone. When that tree grew to have fruit, his children loved it and so did everyone who tried it. Mr. Hass copyrighted it and today you will likely see a Hass on the supermarket shelf.

Once the orchards were established, the California Avocados Association had to start drumming up sales otherwise the fruit would not last. What we consider normal – taste testing, recipes, advertising or marketing to people to try and then buy the fruit on a regular basis was done. The Super Bowl is the most watched TV show of the year, and the industry has branded guacamole as a staple. More avocados are sold at that time than any other time of the year. We all like them.

Linking to dividend paying stocks, every product we buy has a history and logistics on how the product gets to a mass market. In the food industry, taste and quality matter, after that it takes a lot of marketing, technology and work to get people to try and buy the product on a regular basis, otherwise the product is “toast”. But once that happens as long as the margins are good, profitability happens and dividends can be paid. Just remember, in the supermarket and other markets, many products are not there in 3 months, many are never to be seen again, but some stay a long time, why?

There are more questions than answers, till the next time – to raising questions.

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